ANA, Lufthansa announce cargo business tie-up

Japan's All Nippon Airways (ANA) and Lufthansa of Germany on Wednesday (Sep 3) announced an air cargo tie up as they look to fight off intense competition from budget airlines on passenger routes. The airlines said they had won regulatory approval for the agreement, which will see them integrate network planning, pricing, sales and handling on all routes between Japan and Europe.

"The two carriers aim to introduce the joint approach on shipments originating from Japan to Europe in winter 2014/2015 and for shipments from Europe to Japan in mid-2015," they said in a statement. "The joint venture will benefit customers by generating a greater selection of routings and a wider range of service options. Customers will especially profit from a larger and faster network with more direct flights, more destinations and more frequencies."

ANA and Lufthansa, both members of the Star Alliance global airline network, launched a joint venture for Japan-Europe passenger flights two years ago. The Japanese carrier holds a 17 per cent market share for air freight between Japan and Europe, while Lufthansa has 16 per cent, the leading Nikkei business daily said on Wednesday. Mainline carriers' cargo businesses have become increasingly crucial to their bottom line as they battle budget airlines in the passenger market.

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Air India joins global aviation alliance

Air India has joined the Star Alliance network of global airlines seven years after its first attempt, the Indian government announced Tuesday, in a major boost for the loss-making state-run carrier.

Civil Aviation Minister Ashok Gajapathi Raju told reporters in New Delhi that Air India would increase its revenue by about five percent by entering the alliance which includes Lufthansa, Singapore Airlines and Air Canada.

"It is a new beginning for Air India and we wish they fly higher than they have already flown," said Raju, according to the PTI news agency.

The deal is expected to be formalised next month and will give Air India access to the 26-member alliance's network, which covers more than 1,300 destinations.

The Star Alliance of global airlines shares a fleet of more than 4,000 aircraft serving an estimated 640 million passengers annually with over 22,000 daily flights.

Negotiations started in 2007 but hit a roadblock three years ago when Air India failed to meet the minimum joining requirements.

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Air India to start talks on joining Star Alliance

Star Alliance has lifted the suspension on Air India's entry into the global airline body, the national carrier said on Friday, bringing hopes for the loss-making airline to expand its global presence even as its margins are getting squeezed in the domestic market.

"With this decision, final process for eventual entry of Air India has begun. Once the airline becomes a member, Air India passengers will enjoy enormous benefits, including seamless transfers while travelling across the world, more frequent flyer mileage points, code sharing leading to a wider choice of flights and access to facilities at over 1,000 lounges worldwide," said the carrier in a statement.

 "The market in India is now showing signs of stabilisation. Today we see an Air India which has successfully completed its merger with Indian Airlines and is building up a new fleet that forms the basis for a much improved level of service. This is why we believe the time is now right to recommence the integration process," said Mark Schwab, CEO of Star Alliance, after the board meeting.

"The re-integration process will begin now. There have been some fresh requirements brought into the structure since 2011. We will have to do a gap analysis to integrate with the system," said Pankaj Srivastava, director commercial at Air India.

The 28-member alliance's network offers 21,900 daily flights to 1,328 airports in 195 countries. It is the world's biggest airline alliance with a 12.9% share of the global airline market, according to data from Sydney-based CAPA-Centre for Aviation.

Air India's entry into the alliance is crucial for the airline to take on the massive competition from international carriers such as Etihad Airways which recently announced a doubling of its flights to India, under enhanced bilateral rights between India and Abu Dhabi.

Etihad has bought a 24% stake in Jet Airways, India's second-largest carrier by market share. Jet Airways too plans to connect 23 cities to Abu Dhabi.

The country is also set to enhance bilateral rights with Qatar, which means Qatar Airways too will significantly enhance capacity to India gaining a large share of its international traffic.

China, Dubai and Bahrain, too, have sought an increase in bilateral seat entitlements.

Moreover Singapore Airlines and AirAsia are also setting local carriers in India and may seek international flying rights.

The government is looking at relaxing its current rule under which a domestic carrier has to complete five years of domestic operations and have a fleet of 20 planes in order to be eligible for flying overseas.

Back home, Air India's margins have been hit by high input costs, slow traffic growth, cutthroat competition and its own problems of an inflated salary bill and the interest burden of an earlier plane purchase worth $15 billion.

The carrier has been making losses since 2007 after it was merged with erstwhile state-run domestic carrier Indian Airlines and has been over the last few years surviving largely on cash handouts from the government.

The airline recently gave an extension to its former director Deepak Brara to spearhead the airline's pitch to become a member of the alliance.

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Singapore Airlines increases baggage allowance

Travellers can now look forward to more free checked-in baggage allowance for Singapore Airlines (SIA) and SilkAir flights from Friday (Nov 15), for all classes of travel, SIA announced today.

Checked-in baggage allowances will increase by 10 kg across all classes of travel for all flights (except to and from United States and Brazil), bringing the free baggage allowances of Suites and First Class, Business Class and Economy Class to 50 kg, 40 kg and 30 kg respectively.

For flights to and from the United States, where a per-piece allowance applies, customers travelling in Suites, First Class and Business Class will be entitled to check in two pieces of luggage of up to 32 kg each, up from 23 kg previously.

SIA Senior Vice President Sales & Marketing, Mr Chin Yau Seng said: “Increasing baggage allowances across all classes of travel is in response to feedback from our customers and reaffirms our commitment to constantly enhancing customer service.”

KrisFlyer Elite Gold and Star Alliance Gold members will continue to enjoy an additional 20 kg of baggage allowance across all travel classes, or one extra piece of checked-in baggage when travelling to or from the United States and Brazil.

PPS Club members will also continue to be entitled to double the checked-in baggage allowance in their respective class of travel.

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Taiwan's EVA Air joins world's biggest air alliance

Taiwan's EVA Airways on Tuesday joined Star Alliance, the world's biggest airline grouping, in a move that could give it an edge over regional rivals like China Airlines.

"EVA Air has successfully completed all joining requirements and I can confirm that our chief executive board has now unanimously accepted EVA Air into our alliance," Star Alliance CEO Mark Schwab announced at a ceremony in the north of the island.

The move could see an increase in the carrier's occupancy rate by up to three percentage points, according to chairman Chang Kuo-wei, as passengers benefit from greater integration with leading airlines.

It took EVA Air a year and half to meet the alliance requirements, foremost the adjustment of its computer systems that will enable passengers to use air miles earned through other alliance members.

In March last year, an EVA executive said joining the grouping would give the carrier an advantage over China Airlines which belongs to the smaller Sky Team.

EVA, Taiwan's second largest airline, becomes the 28th member of the Star Alliance, which also includes carriers such as Lufthansa, Thai Airways International, United Airlines and Air Canada.

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Important strategy to widen its coverage and fight against the stronger China Airlines.